Subsidiary evolution in a transition economy : Kemira GrowHow in the Russian fertilizer market

This paper illustrates subsidiary evolution in a transition economy through the development of a multinational company’s Russian subsidiary. Building on the concept of subsidiary evolution, we analyze how knowledge transfer from headquarters and application of the subsidiary management’s local knowledge contributed to the process of change. Our empirical analysis is based on four in-depth interviews with senior managers from the company's headquarters and the Russian subsidiary and on documentary evidence. Our results show that the subsidiary capabilities were developed as a combination of knowledge transfer from headquarters at the beginning of the operations and of learning by the Russian management.